How Radio Will Kill the Radio Star
With a third of talk radio's audience now over 65, on-air talent is aging apace -- leaving the future of a stagnant, debt-saddled industry in question.
There's no room on the radio for a new Howard Stern today," says Tom Leykis. The firebrand talk show host is among the few former FM personalities who could command a Stern-like contract, thanks to stellar ratings in 25 markets over 12 years. But after CBS Radio pulled the plug on his show in 2009 (paying out his $20 million-plus contract), the popular host didn't jump to a terrestrial station or to satellite, opting instead to create his own Internet radio network symbolically dubbed "The New Normal." With four fully-licensed music stations streaming some 50,000 songs along with his own daily call-in show, 400,000 tuned in during launch week in April and 1.7 million in its first month -- "more than the cumulative audiences of 14 Los Angeles radio stations," Leykis boasts. With a $1 million investment of his own money, he expects to be profitable by the end of the year.
Leykis, 56, says he left his first love not because he couldn't get paid, but because he believes traditional radio is dying. Thanks to iPods, podcasts and hundreds of satellite stations, radio audiences are getting older (more than a third of talk-radio listeners are 65 and older) and the personalities are aging out of relevance. "KABC's new show is hosted by Geraldo Rivera, who's 68, John and Ken came on KFI in 1992, Bill Handel in 1988, Rush Limbaugh in 1989," notes Leykis of the L.A. market's top English-language stars. The spring chicken, he says with a laugh, is 48-year-old Tim Conway Jr. At 37, KIIS star Ryan Seacrest is actually younger, but it is telling that L.A.'s youth-targeted alt-rock outlet KROQ has had the same morning hosts, Kevin and Bean, for more than 20 years. Pop station KAMP's Carson Daly, 39, first appeared on KROQ in the mid-1990s.
More frightening for lovers of traditional, ad-supported radio: There don't appear to be too many future Seacrests primed to take over (the American Idol host got his start at Atlanta's WSTR), partly due to diminishing pay but also because people aren't listening. As many as 40 percent of Americans consume music on digital devices, according to the Pew Research Center's Project for Excellence in Journalism, and that number is expected to double by 2015. "Each successive generation is turning away from radio," says Michael Harrison, publisher of radio trades Talkers and Radio-Info.com. "That's not necessarily terrible. The upper demos today are wealthy and active and have a lot of years ahead of them. But looking down the road 15 years, it's problematic."
More pressing is the reality for congloms such as Sirius XM and Clear Channel, which are saddled with debt that came post-consolidation and prerecession. In Clear Channel's case, its 2008 sale to Bain Capital and Thomas H. Lee Partners has left the radio group, which owns 850 stations and has the largest reach in the country, $20 billion in the red, with massive payments due in 2014 and 2016. "A lot of radio can't afford to be radio," says Harrison. "They're winging it. High-paid personalities, news departments … When the ownership has to concentrate on cutting costs, alleviating debt and not taking on expenses, it's difficult to put attention into creating a product." Leykis agrees: "Why spend $100 million to buy a frequency when most people, even those over 40, are getting content on their iPhones? You have to find another way to get your curated content out."
For the most part, the belt-tightening has only served to stem the bleeding, not increase profits, although radio revenues grew by 1 percent to $17.4 billion in 2011, according to the Radio Advertising Bureau -- a fraction of the medium's 6 percent growth in 2010.
It's a grim outlook that radio industry observers long have dreaded, where centralized programming rules (Seacrest is currently heard on 177 stations worldwide), program directors oversee a half-dozen stations and local jocks are rarely present. Leykis predicts many AM stations will simply cease to exist in the coming years. Instead, the frequency will be used for "WiFi, cell phone service, opening and closing garage doors, police, fire or aviation channels …" And he doesn't bemoan that future. "It would be a better use for the frequency." That leaves one wondering: Will anybody object?
TOP 5 RADIO PERSONALITIES
- Rush Limbaugh, 61: The Rush Limbaugh Show (Premiere Networks) -- 15 million listeners per week
- Sean Hannity, 50: The Sean Hannity Show (Premiere Networks) -- 14 million listeners per week
- Michael Savage, 70: The Savage Nation (Talk Radio Network) -- 9 million listeners per week
- Laura Ingraham, 48: The Laura Ingraham Show (Talk Radio Network) -- 6 million listeners per week
- Ed Schultz, 58: The Ed Schultz Show (Dial Global) -- 3 million listeners per week
Source: Talkers magazine